China Won't Sink Copper's Ship

In China's latest metals-for-loans scandal, it is easy to make mountains out of molehills. As far as copper is concerned, investors should try to see the issue for what it is—a medium-size molehill.

Copper spot prices have slumped 4% since reports that Chinese authorities are cracking down on traders who use metals such as copper as collateral for loans. The case is complicated by evidence that a trader may have used metal stored at the northeastern port of Qingdao as collateral for multiple loans, possibly defrauding several...